Purchase Activated Manufacturing factories make a net profit after only 300 apparel units a day...Each line can produce up to 3000 a day. Learn how it works and build your own. Watch the videos linked below and follow this blog.

Friday, March 10, 2017

There are hundreds of excuses for why the U.S. has fallen so
far behind in the manufacturing of apparel. Regulations like the ‘Clean Air and
Clean Water Acts” in the 1970’S and the Demand Manufacturing Apparel
Architecture project of the 1990’s that spent over $220 million taxpayer
dollars to enhance production control which ultimately facilitated the movement
of over 90% of apparel production off shore.

Make no mistake,
whatever the theory or well-meaning government program we have fallen behind
and are not catching up. Excuses range from conspiracy theories about
international corporations, money in politics, media bias, international trade agreements
and many more. Most manufacturers, brands and retailers site labor costs as the
primary cause of the loss of manufacturing. No matter what theory is the
current viral thinking, we need to step
back and look at the forest instead of
our favorite tree. In this case the industries favorite “tree” is cost of goods
(COG) while the “forest” is loss of potential profits from discounted and unsold goods.

Fundamentally, we are all dealing
with the transition from the mechanical systems of the industrial revolution to
an information based digital age. Sometimes these historical macro-evolutions
are obscured by scale or the camouflaging details of daily business. One of the
most stubborn and widely damaging effects of this evolution is the continued
dedication of major world economies to the out dated dependence on mass
production. This protection of
the status quo has caused increasing failures at the brand and manufacturers
level and now increased more public failures at retail where profit losses and
additional costs can no longer be covered buy creating volume through discounts
and clearance.

Cost based mass production sourcing is blocking profits and job growth...

Big finance and big companies, whose very life depends on
maintaining the structure of mass production, have dominated this transition
with its many ups and downs. They have invested tremendous amounts of capital,
personnel, and international agreements into the perpetuation of this outdated
manufacturing system.

The Fatal Flaw in Cost-Based Manufacturing

The basic premise of this system is that if you manufacture
a lot of something efficiently, the cost savings from economy of scale will
insure you make a profit. This concept was valid when markets were all in an
expansion mode during the industrial revolution and later after the world wars,
because no matter how much product you made you could always find a customer
looking for it. Mass distribution and the increased reach of international
marketing, have made it difficult to find large enough new markets to justify
the scale of mass production required to support the level of efficiency
required to insure a profit. In fact the argument that new technology produces
new expansion markets has lost its credibility because of the ability to reach
markets with competitive product at velocities never before possible. In fact
every new product introduction becomes a share market almost immediately.The inability to dominate the market with the
new products that are produced with the flawed mass manufacturing concepts
that, scale produces cost efficiency, which produces profit, has created a glut
of inventory in most product categories and destroyed the concept of supply and
demand in its traditional form. The
current economic Maxim is no longer “supply and demand”, it’s “supply and
discount”.Product differentiation is
too slow under this mass paradigm to keep up with the information age. The risk of mass production
inventory has not been mitigated at all by new “time-to-market” digital
technology, in fact is has exacerbated the losses by encouraging more
pre-production costs and inventory sku’s.We've now have replaced the uniqueness of the product with simply
the price of the product. This change in marketing and merchandising is
designed to capitalize on the only remaining positive this manufacturing
strategy offers. Large brands can flood the market with a volume of product,
using discount structures to drown their competition. The scale of mass
manufacturing and its requirement to drive profit through cost makes this
product difference (price) really only available to mass retailers and
marketers who merchandise on the basis of product movement not on the basis of
product difference. This large-scale approach creates huge amounts of inventory
which in turn equal huge amounts of risk. Risk that can only be minimized by
volume merchandising, high-level financing, bulk shipping and international
trade agreements which capitalize on low labor costs in developing countries.
Collateral costs like environmental protection, worker safety, health insurance
and other benefits can destroy the profits in a cost-based system. All the
flag-waving, job building and “Buy American” speeches, promotions and promises
cannot change this basic strategy of profit based on cost structure. Since
these large companies and their financial partners depend on mass manufacturing
and self-perpetuating theories of profit-based primarily on driving costs down
we cannot expect a change. In fact, we can expect massive failures of iconic
brands and retailers as the cost/risk dynamics collapse the current sourcing
structure for many players and eventually all but a few high volume discount
“box” stores and omnibus online marketers.Attacking cost with mass production has four logical outcomes: first,
massive inventories without guaranteed sales that must be discounted.Second, securing the lowest labor cost, which
usually means bad working conditions.Third, lowest cost manufacturing technology, which means highest water
use and toxic pollution and collateral permanent environment damage and finally, fourth,
eventual degradation of quality.

All of these negative outcomes are the impact of one feature
of the current sourcing strategy the pseudo belief that large inventories cost
less and are the foundation of profits and sustainability. Often, the object or
goal of the previous structure turns out to be at the center of the actions
required to affect the change. Since the ultimate goal of mass manufacturing is
to create an environment with the lowest possible costs of production.
Therefore, reducing the unit cost of the available inventory that is offered
for sale. The byproduct of this drive for efficiency and lower costs is an
increase in the size of the inventory related to cost not sales. This
disconnect between the payout of funds for production and incoming funds
resulting from sales creates the risk that is unsustainable.

The simplest
solutions to this conundrum are either, make less and charge more or make more
and sell more for less. In fact this decision about whether to position
the selling proposition based on quality or quantity is at the center of the
basic inventory decisions, which, drive the manufacturing scheme.The way in which a company handles inventory
risk is the driving decision-maker in every choice from their accounting system
to their personnel structure. Inventory drives required capital for start up;
inventory drives financing and the level of risk; inventory drives product
selection and inventory on hand drives advertising and marketing. When a
company decides between holding a limited exclusive inventory at high price or
a massive fast moving discounted inventory they place themselves at either end
of a decision-making spectrum. Once that decision about inventory management
size has been made the rest of the decisions about organization and marketing
traditionally have been cast in stone.

Purchase Activated Manufacturing (PAM)

No Physical Inventory= No Risk

Companies have had success at either end
of this simple linear solution, there is however, a third nonlinear answer,
which can provide increased profit and jobs and relief from the risk of both of
these positions. That solution is simply not to make it until after it has
sold!This manufacturing concept is
called Purchase Activated Manufacturing (PAM) and it is characterized by a
structure in which, the product is purchased before it is manufactured. This
solution attacks discount and overproduction dumping losses while limiting cost
to product sold.

The industry should continue to look for efficiency in
manufacturing, but until we attack the loss side of the equation we will not
enjoy sustainable domestic manufacturing.The pursuit of demand then supply
has been a goal of the forward thinkers in the business for years, but the
business climate and the technology have not been in place to accomplish that
goal.Both are in place now, sales,
merchandising, coloring, cutting, production and fulfillment technology has
been tested and integrated making wholesale demand and even consumer purchase
activated inventory goals a reality. Smaller and larger retailers, brands and
manufactures who are willing test and embrace this strategy, will be the
survivors as market shifts from the industrial age to the information age of
integrated business models and efficiency through agility.

Cost of goods is a product of actual purchases
not inventory stocking.

Virtual inventory limits or eliminates prefinancing
or factoring of manufacturing

All sizes sell out no odd sizes or orphans

Never out of stock and never over stock

YOU
ALWAYS MAKE A PROFIT

A working PAM factory capacity up to
1500 individually sized, colored or printed and finished units per day,

Over the last twenty years our team
has succeeded, failed, invented and learned most of the elements required to
implement this evolution to purchase based manufacturing based on integration, information
and virtual unlimited inventory. Although the final structure of the process
needs to be tuned for each company’s specific needs there are ten principles
that serve as a road map for the decisions along the way.These principles can be interpreted in
different ways but they all must be included in some form to ensure success.Over the next ten weeks they will be covered
in detail, but here is a look ahead to the subjects that will be included.

1.Follow the Money… All funds ultimately originate from the consumer
making consumer demand the fundamental element of success and the first element
of building an integrated system.Tracking these funds on the path to your bank account determines the
real losses available to recover from inventory bloat at every level.

6.Manufacturing
Capacity is Set by Distribution Path… Manufacturing
scale and path is a function of distribution lead time and customer type (wholesale,
retail or direct consumer) can determine through-put and line structure.

7.Income
is Based on Cost per Unit Sold NOT Cost per Unit… Percentage of sell-through to the consumer is the key
determinant of success at every level. Never over stock, Never out of stock is
the rule at every level.

9.Test Markets are Multi-Platform… Test markets must include platform choices and product
variations.Testmarket results can be
based on actual purchases and collect kenetic, demographic and decision data.

10.Total Quality Manufacturing Depends on
Team Building… Production errors must be
reduced to near zero through integrated data paths, team design and total
quality management. Team design and language independent quality control is
critical.

Building Domestic Apparel Manufacturing

About Me

Bill Grier is a pioneer in the digital print
industry. As the inventor of numerous international and U.S. patents,

As an originator of the AM4U project, Bill is the
inventor of and chief scientist responsible for perfecting Active
Tunnel Coloration (ATC) infusion technology.

Link: https://www.youtube.com/watch?v=2Xv67p9dkSE&t=11s

Bill’s early years were spent learning the
complexities of leadership first as a young manager at General Foods in White
Plains, NY and later as a member of the White House Staff.Bill then returned to college and upon
graduation joined the United States
Marine Corps where he was commissioned a Second Lieutenant in 1969.During a short but formative duty in Southern
California, Bill met his wife/business partner of the last 46 years.He had a 37-­‐year military career of active and reserve duty holding 12
Commands retiring as a US Marine Corps Colonel.

After working and managing in the disciplines of
advertising, conventional lithography and retail art distribution, in1987 he
began working in the new industry of digital printing. In 1991, Bill joined
Lockheed’s Cal Comp Division as the product manager for their new wide format
electrostatic printer.Three years of engineering, marketing and project
management culminated in record sales and honors.

Bill was
then recruited by CACTUS Inc. one of the earliest large format RIP
producers.While Chief Operating Officer
at CACTUS, Bill studied the physics of polymer crystallization, which lead to
numerous discoveries in the coloring of polyester fabrics.

After CACTUS was sold to 3M, Bill founded the
Digital Group where he worked with apparel companies to harness the infant
technology for apparel dye and printing coloration.He continued his exploration of the physics
of polymer fibers, which lead him to founding Critical Mass Manufacturing, Inc.in February of 2011. His vision brought
together digital printing and the physics of Active Tunnel Coloration™ enabling a
new apparel manufacturing paradigm called Demand Manufacturing or Purchase
Activated Manufacturing™.